LNG tank company expands with new Houston office

This graphic shows the typical arrangement of a gas tank on a cargo ship.

This graphic shows the typical arrangement of a gas tank on a cargo ship.

Photo: GTT

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Inside the membrane of a tank.

Inside the membrane of a tank.

Photo: GTT

LNG tank company expands with new Houston office

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GTT, a French designer of large tanks for liquefied natural gas, is setting up a Houston office in anticipation of market shifts tied to cheap natural gas.

The company says it designs the tanks for two-thirds of the world’s 400 liquefied natural gas carrier ships. It is co-owned by the integrated oil giant Total and the utility GDF Suez, both based in France, and the private equity firm Hellman & Friedman, which has offices in New York, San Francisco and London.

Natural gas becomes a liquid, occupying much less volume and therefore better suited to ship transport and storage, when it is chilled to minus 260 degrees Fahrenheit, according to the U.S. Energy Information Administration. Temperatures that cold require specialized storage vessels.

GTT’s tank designs, which it licenses to shipbuilders, have helped it pull in profit in recent years exceeding 100 million euros (about $133 million), according to its Securities and Exchange Commission filings.

Now, with new drilling technology producing abundant and cheap natural gas in the United States, GTT is shifting its focus to other uses for its products.

It plans to market fuel tanks for ships powered by natural gas, said Allyn Risley, chairman of GTT North America, in an interview.

“What’s driving our interest is the desire of people to convert both onshore vehicles and marine transportation vessels to be fueled by natural gas and in particular to be fueled by liquefied natural gas,” Risley said.

Changing regulations on marine vehicle emissions, combined with low natural gas prices, are likely to prompt construction of more U.S. ships that run on natural gas, he said. Federal law requires that ships transporting goods between U.S. ports be built in the United States.

“In 2010 there were something like 9,000 coastal and inland water vessels of one sort or the other,” Risley said. “Not all of them will be of a size that would generate an interest in our technology.

But even 10 percent, he said, “would be quite an interesting market for us.”

GTT’s tank designs — called membrane containment systems — employ lighter, thinner materials than other forms of liquefied natural gas tanks. The design allows them to operate more efficiently, taking up less space and adding less weight on ships while storing as much fuel as other tanks, Risley said.